Graduation from LDC status not possible by 2021: CPD

The Centre for Policy Dialogue on Thursday said that Bangladesh would need at least another decade for graduating from the least developed countries’ category to a developing country as it lagged behind in human assets index and economic vulnerability index. ‘It will take at least a decade for graduation even if we become highly ambitious,’ CPD distinguished fellow Debapriya Bhattacharya said at a press briefing in Dhaka organised on the occasion of global launching of United Nations Conference on Trade and Development LDC Report-2014. Bangladesh is not considered for graduation from LDC in next review of UN to be held in 2015 and it is also uncertain if it will be considered in next review to be held in 2018 because of its current performance, he said. UN takes 6 years in two phases to observe the development of a LDC for graduation purpose, he said. The government, however, has already made commitment to graduate from LDC by 2021. According to UN review in 2012, which is the essence of the UNCTAD LDC Report-2014,Bangladesh’s economic vulnerability remained higher than the UN threshold. Bangladesh scored 32.4 in economic vulnerable index although UN threshold is 32. On the other hand, Bangladesh scored only 54.7 in human asset index although the UN threshold is 66. In this case Bangladesh needs to score higher.

Bangladesh, however, remains in a better position in per capita income index, he said. Bangladesh’s current per capita income is US$ 1,190, equal to UN threshold set in 2012 for graduation, but the threshold is reset after every three years. According to UN, a country needs to meet at least two criteria out of three. Debapriya said that Bangladesh should concentrate on graduation from LDCs through achieving HAI and EVI indexes as it will ensure sustainable economic development in the country instead of emphasizing to become middle income country. ‘It seems that many are expressing satisfaction over the possibility of becoming a middle income country soon but becoming MIC does not mean that a country has graduated from LDCs,’ he said, adding that without structural transformation, MIC status will not ensure sustainable economic development. UNCTAD in its report said that LDCs’ economy remained stuck in a vicious circle in which higher economic growth could not improve human development and living standards of people in 48 LDCs. Debapriya said that there were also some signs including failure in bringing structural transformation, lack of quality jobs creation, low productivity of labour, dependence on one single sector in export earnings indicating that economic vicious circle was also visible in Bangladesh economy though it achieved significant achievements in millennium development goals. The country achieved many indicators of MDGs but it failed to generate quality jobs which were important for increasing per capita income and poverty reduction despite its economy grew on an average 6 per cent in last few years, he said.

Bangladesh also failed to transform its economy through increasing the role of industry and services sectors in generating employment, increasing productivity and GDP growth, he said, adding that its economy is still dependent on agriculture. He said that most portion of employment was generated in low productive informal sectors in these years in Bangladesh. Agriculture sector generates employment for 54.4 per cent of the population while it contributes only 17.2 per cent of GDP. On the other hand, manufacturing sector generates only 13.7 per cent employment and contributes 18.5 per cent of GDP, according to UNCTAD report. To reverse the vicious circle, the post-2015 development agenda should pursue economic development with structural transformation and human development together, it said. UNCTAD suggested the LDCs to mobilize resources for public and private investment including attracting foreign direct investment and adopt active industrial policies emphasizing on potential areas along with existing successful sectors. Developed countries should also fulfill their commitments to give a certain portion of their gross national income to LDCs to help them in graduation, it said. At the briefing, CPD research fellow Towfiqul Islam Khan presented the UNCTAD report while CPD executive director Mustafizur Rahman spoke.

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